reflected in Exhibits G3000, G3100 and G3200.
At that time Pelullo was seeking to acquire National Media a so-called "infomercial company" which had $ 10 million in cash. The purchase was to be effected through Moshe Milstein, because the owner of National Media shares, Abe Solomon, would not wish to do business with Pelullo.
Media Group I, Inc., was established as the general partner to facilitate the project. It had its office at Pelullo's office in Miami. Limited partners included Webb Press(a Pelullo company), LRP Corp. (another Pelullo company), and GH Enterprises (a company owned by Hellhake's father). Web Press was responsible for putting up $ 1.29 million in cash towards the acquisition of the National Media shares. Exhibits G3000, G3100 and G3200 reflect the manner in which the proceeds of the Retirement Fund's UNUM contract were applied to advance Pelullo's quest for National Media.
On December 1, 1989, the day after the UNUM contract proceeds were deposited in the 174 account, $ 1,000,000 was transferred to an Equity Finance Group account and immediately wired to an Adorno, Zeder, Allen account in Miami. From the Adorno, Zeder, Allen account $ 100,000 was paid to Nursery Acquisition Corp. (a Pelullo company engaged in another Pelullo acquisition for which $ 100,000 was required to obtain an extension of a closing date). On December 4 Adorno, Zeder, Allen wired $ 900,000 back to the 174 account at the Summit Bank. On December 7, the $ 900,000 passed through an Equity Finance Group account, a Web Press, Inc. account, a Media Partners, Inc. account, and finally still on the same day into a Wilentz, Goldman & Spitzer trust account. That firm was handling the National Media transaction for Media Partners.
The National Media acquisition did not close (Solomon had learned of Pelullo's involvement) and, as was the case in so many of Pelullo's ventures, litigation ensued. Pelullo informed Hellhake that the UNUM funds would have to be used to finance that litigation and would be paid back upon the acquisition of National Media. The manner in which the $ 900,000 and other funds transferred to the Wilentz, Goldman & Spitzer trust account were transmitted to a variety of Pelullo companies and other interests is set forth in Exhibit G3200.
When $ 1 million of UNUM contract funds was transferred out of the 174 account on December 1, 1989, $ 400,000 of UNUM contract funds remained in that account. Exhibit G3100 reflects that $ 2,245 was used to cover an overdraft on the account and the balance was used for a multitude of Pelullo corporate and personal purposes.
As a result of the civil litigation which Gerardi and Marqueen instituted in the federal court, Summit Trust Company was appointed trustee of the Employees Benefit Plans. It faced the daunting task of marshaling assets. The evidence at the trial of the criminal case disclosed the road blocks which Hellhake and Pelullo created to prevent Summit Trust from learning the true facts. In particular they made false claims against the bank and lied about the UNUM contract proceeds.
Ultimately the National Media lawsuit was settled for $ 2 million, and of that sum $ 1.4 was paid to the Employees Benefit Plans - a part, but only a part, of the enormous sums which Pelullo and his underlings embezzled from these plans.
A. Sufficiency of the Evidence: Pelullo contends that there was insufficient evidence to prove an embezzlement or a conspiracy. I suppose defense counsel must raise every conceivable argument, but this contention borders on the frivolous.
Pelullo's method of operation was to conduct his multitudinous business and personal transactions through a host of corporate and partnership entities and through a dizzying succession of wire transfers, both necessary and unnecessary to accomplish an objective. As a result Pelullo was able to conceal the nature of his undertakings and deceive those with whom he was dealing, not only the Employees Benefit Plans which are the subject of this case, but also others who did business with him. All of this activity generated mountains of documents, as disclosed by the search of the Miami warehouse. No one but Pelullo could comprehend it all in its entirety. He alone, an obviously highly intelligent person, was able to keep track of it all and manipulate it to his advantage.
Through what most have been extraordinary effort and perseverance special Agent Rosario Ruffino and the Assistant United States attorneys assigned to this case were able to extract from the mountain of records those which reflected the embezzlement and disposition of Employees Benefit Plan assets and to prepare charts which make comprehensible the transactions which took place. That evidence together with the undisputed testimony that Pelullo controlled every significant decision either directly or through his minions or through persons he deceived, establishes that the embezzlements charged in the indictment took place and that Pelullo was the person previously responsible for them.
The fact that Marqueen authorized the $ 750,000 "loans" to Granada is not determinative. The fact is, as described above, Pelullo had instructed Hellhake to misrepresent and conceal the true circumstances when he persuaded Gerardi and Marqueen to authorize the payment to Granada.
The fact that Corona and Hellhake (two of Pelullo's closest confederates) authorized the "loan" to ATTS does not absolve Pelullo. It is further proof that having removed Gerardi and Marqueen, he through his minions was raiding the Employees Benefit Plans.
Pelullo offers no reason why the use of the UNUM contract funds was not an embezzlement except to argue that on December 1, 1989 when $ 1,000,000 was wired to an Equity Finance Group account he did not know it was the proceeds of the UNUM contract. His lack of knowledge is inconceivable given his absolute control and daily monitoring of all his companies' bank accounts. Further, his knowledge was evidenced by the testimony of Hellhake, Manny Ferro, Janice Larson, Bonnie Lynn, Angela Malgeri and of his own witness Frank Agostino.
The evidence of embezzlement from the Retirement Plan and the Thrift Plan is overwhelming.
Similarly that is overwhelming evidence of a conspiracy between Pelullo and Hellhake and Corona to embezzle pension monies. The roles of Hellhake and Corona are described in the review of the evidence set forth above. Others may also have been involved in the conspiracy, but is in unnecessary to address that question here.
B. Money Laundering Counts : Counts 13-54 charge Pelullo with money laundering in violation of 18 U.S.C. § 1956(a)(1)(A)(i) and § 1956(a)(1)(B)(i). The statute provides:
(a)(1) Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity -
(A)(i) with the intent to promote the carrying on of specified unlawful activity; or